The months-long cryptocurrency bear market has made some investors disillusioned and hopeless, as their crypto assets remain underwater. But I believe my thesis shows there are strong macroeconomic reasons to remain bullish on the crypto asset class over the long run. I will first evaluate the usual reasons people give for being bullish on crypto, […]

I have been meaning to post something like this a while ago, but have been very busy lately. Just wanted to share my thoughts to people who are most likely interested in macro price movements. Overall BAT has been doing a lot of updates, developments, and spreading adoption. To spread adoption BAT is using their UGP as an incentive. In this reddit post I will be discussing where BAT is in terms of supply/ demand, it's effect on price, and future macro price movements.

My thoughts:

Price will most likely not move based on adoption / development for a very long time (we will just follow BTC like every other cryptocurrency). When I took several economic classes several years ago, my professor always emphasized the importance of looking back at supply & demand, which is what I will be doing next.

The Supply & Demand Situation

Current Demand:

If we look at things from a just a supply/ demand perspective, then we see that most of the people who are buying tokens right now are either holders, traders, or some institutions (very low institutional money). I was going to include "people" who want to support youtubers, streamers, etc; but those people are given free BAT; buying BAT is still difficult since a lot of exchanges require KYC and limit audience through age limits. This is a significant problem that needs to be fixed (look at how easy it is to donate to streamers via paypal or debit cards).

Unrelated Suggestion: I also believe there needs to be recognition factor for donations using the Brave browser (e.g. Top 10 donators to X youtuber or streamer [with an anonymous option to be opted out if needed]).

Current Supply:

BAT team has been introducing a number of BAT tokens to the current circulating supply through promos, partnerships, downloads, etc. This helps adoption significantly and is required as this point as stated in the whitepaper. However, right now most of this BAT (or a large %) will be ultimately sold-off, affecting price negatively.

Why do I think so? Because most of those youtubers, streamers, etc. have to pay their bills and holding a volatile asset (that can easily drop by -50% in weeks) is not realistic or achievable especially to new streamers. We will most likely reach a point where the supply will crush the demand (this has also happened/ is still happening, but will contribute this due to BTC movements as well).

Future Demand:

BAT will be adding future demand to raise the price and eventually reach equilibrium through advertisement integration on their platform. BAT tokens will have a user-case now and advertisers will be forced to buy BAT to advertise on Brave's platform. This creates a demand for BAT and the more advertisements are bought , the more likely BAT's price will increase. This is the point where price will start rising until major advertisement companies join; where price will INCREASE.

E.g. If advertisers will spend $1B in an advertisement budget using Brave, then the price will most likely increase since they will have to buy $1B worth of BAT.

Continuing on, Brave will most likely need to have an exceptional platform for advertisers in order for them to switch from current advertisement mediums. Brave will need to prove that their current model works through sales and impact on companies. Brave may also need better tools for advertisers. For example, if Brave has better ad targeting (e.g. advertisers can pick manually who they want to advertise on [assuming the user accepts Brave ads to this specific individual], then a lot of advertisers might switch.

Why? because google and other advertiser platforms fail to provide those options adequately (I know some of them do, but they often don't work as advertised). A lot of other options might bring advertisers toward Brave; Brave is most likely researching this or talking to advertisers to see what they want while building the platform. Other things that might be big may include individuals like youtubers, twitch streamers, etc. who may only accept Brave advertisements.